The Ethics of Enabling

As noted in this week’s discussion on people using the Amazon self-publishing system (and presumably the Barnes and Noble equivalent) to knock-off products or divert sales with misleading designs and descriptions of similar products, there is no doubt that the company can shut down such operations if it becomes aware of them, or that they will take such action if complaints are filed. What struck me about the situation was the inherent conflict of interest involved: Amazon gets a piece of every self-publishing sale, knock-off or not, which gives them little incentive to police the system; even if a bilked customer demands a refund, the company still gets the interest from holding their money for a day or more – and if the customer just buys a second book (the one they originally wanted) without demanding a refund, the company makes two sales. It appears that there are several ethics questions we could ask about this situation – as well as some completely practical ones…

First of all, if any company knows that one of its products or services is being used in an unethical (but not technically illegal) manner, does that company have any responsibility to prevent such usage? In this case, Amazon’s own e-publishing service is making the unethical practice possible, and could easily enable people to steal and republish material outright, but one can also use Western Union wire transfer services to secure the money from phishing scams, or use perfectly innocent optical read/write drives to pirate DVD movies or CDs. Any company has a responsibility to protect its customers from outright fraud, at least to the extent that it can, but does the company have an ethical responsibility to protect customers from acts that aren’t illegal so much as generally unpleasant?

On the other hand, suppose a company does take drastic actions to safeguard its customers. Amazon could use a variety of semi-autonomous software packages to scan and monitor its e-book library looking for obvious scams; they would also need qualified readers to examine works flagged as knock-offs (or outright copyright infringement) to determine if civil or criminal trials with be forthcoming, and a more complex accounting system to make sure that no one who deserves to be paid has their revenue delayed by a malicious false claim, and no one who doesn’t deserve to be paid benefits from his or her ill-gotten gains. But while none of this is difficult, or even that complicated, any such action will incur costs, which will detract from the bottom line, resulting in lower profits, lower dividends, and ultimately lower pay for the employees as well. If the expenses are severe enough the result could be higher pricing overall, which would also harm customers who aren’t even buying e-books in the first place…

In every business there is going to be some aspect of the operation where the trade-off between optimizing safety and optimizing profitability come into direct opposition – and it generally won’t be possible to maximize both without also bankrupting the company. In this specific case, Amazon could essentially eradicate all knock-offs from their e-book selection, but only at a greatly increased cost that might do in the entire e-book marketplace, or even the company as a whole. It would also be possible for the company to just say “let the buyer beware” and attempt to maximize profit at the cost of every other consideration. And while neither of these extremes is likely to be viable in this case (or in most business models, in fact), the question still remains: at what point does a company’s responsibility to its stockholders, employees and other stakeholders outweigh its responsibility to its customers? Does that answer change if the customers are merely being annoyed or inconvenienced, not defrauded? And on what would you base such a decision, if it was yours to make?

It’s worth thinking about…